String Along With Cable Company, Panel Advises Council

May 12, 1991|By James M. Coram | James M. Coram,Staff writer

Mid-Atlantic Cable Co. probably will get another 19 months to honor its agreement to finish 30 miles of construction in the western and central areas of the county -- sections it was supposed to have hookedup by the end of last year.

The 4-1 recommendation of the County Council's cable advisory committee last week also suggested that the council give Mid-Atlantic until December 1993 to install a system allowing it to carry county government, education and public access channel programs live instead of on tape.

The interconnection with those channels was to have been completed by last July.

The committee gave the financially troubled company exactly what general partner John C. Norcutt wanted.

It could have recommended fines of $300 a day for Mid-Atlantic's failure to meetits construction deadline -- already extended once -- and $100 a dayfor its failure to meet its interconnection deadline.

Mid-Atlantic's three-year-old franchise agreement originally called for providing cable television service to 71 subdivisions by July 9, 1990.

Butthe council granted it an extension until the end of last year.

Despite that, only 61 subdivisions have been serviced.

The company now wants to have until Dec. 31, 1992, to finish construction and offer cable to 520 homes in the 10 remaining subdivisions.

Mid-Atlantic, $5.5 million in debt, cannot borrow more money for construction, Norcutt told the committee.

Therefore, the company would have to stop building for a year to "husband enough money" from subscriber fees to finish construction, Norcutt said.

Subscribers now pay $14.95a month for basic 22-channel service or $20.95 a month for 56-channel service that includes Home Team Sports.

Premium channels are priced individually.

The cable committee's recommendations go to the council for action in June.

Charles Feaga, R-5th, in whose councildistrict most of the unbuilt cable area lies, could not be reached for comment.

Committee members Peter H. Bennett and Roger Caplan wanted to put conditions on the recommendations, but could not convincethe other three members to go along.

Norcutt bristled at the suggestion. He said he wanted to know who he was dealing with -- the County Council or the committee?

If it were the committee, then the county was facing "a litigious situation here" because the committee's role is merely "advisory, not quasi-legislative or quasi-judicial," Norcutt said.

Bennett said the committee is within its rights to recommend that thecouncil impose penalties and sanctions.

"You had an agreement, and you didn't live up to it. What should we do?" Caplan asked Norcutt.

Norcutt said he had already done a lot.

The company lost more than $900,000 last year, he said, and would lose at least another $1 million this year. He said he is personally responsible for Mid-Atlantic's loans.

He said the company didn't know at the time it signedthe franchise agreement that the county would impose a building moratorium in the franchise area, much less that there would be a recession.

"We can't borrow our way out of this problem," Norcutt said. "We can build the cable, but the homes are not coming. The only way (to raise construction money) is through the rates we charge customers."

Bennett had sent the committee a four-page letter April 22 suggesting 10 conditions which he thought Mid-Atlantic should be required to meet in return for being granted an extension.

The conditions would also serve as an "incentive" for Mid-Atlantic "to get on with it," Bennett said.

He wanted Mid-Atlantic to agree not to build in more profitable parts of the county until it had finished the construction specified in the franchise agreement, and to agree that no moneywould be diverted to ventures in other counties until that time.

The Bethesda-based company has operations in Anne Arundel, Baltimore,Montgomery and Prince Georges counties and in Virginia.

Additionally, Bennett wanted Mid-Atlantic to allow the county auditor to make certain no dividends, no raises or special compensation would be given partners, officers or senior executives until all terms of the franchise agreement had been met.

Committee member Donald H. Kirkley advised the committee to "set aside Peter's letter" and not "dignify it by giving it a standing."

Norcutt's proposals had been reviewed by the county Office of Law, but Bennett's suggestions had not, Kirkley said.

After the meeting, Norcutt said he was "pleased that the committee concurred with our suggestions."

cable

These are the subdivisions in the central and western parts of the county that may have to wait as long as 19 months for cable service from Mid-AtlanticCable Co.: